The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Central Bank’s governor yesterday warned that “very near-term risks to the economy have increased” as a result of surging COVID-19 infection rates in The Bahamas and its key tourism source markets.

John Rolle, addressing a 2021 second quarter and half-year economic briefing, said it was important to ensure pandemic-related risks are “reasonably contained if we are to preserve the pace of recovery” in the tourism industry both nationally and worldwide.

“It must be emphasised that in the very near-term, risks to the economy have increased, even if in the months further out they continue to subside,” he warned. “It is our capacity to maintain control over the COVID-19 risks, that will help to define the economy’s near-term trajectory; that is, around sustainability of foreign exchange market conditions, arresting further deterioration in public finances, and keeping financial stability risks in check.”

The Central Bank chief said some of what is required is “completely outside the control of The Bahamas”, and depends on the actions taken by its key source tourism markets. “But the rest of that relates to how we manage the level and spread of contagion inside the country. The Bahamas still has some of the COVID-19 risks it has to manage internally.

Another 35 new COVID-19 infections were recorded on Monday, taking the total number of active cases to more than 2,000 Bahamas-wide. Some 104 persons remain in hospital with the virus, and 14 are in the intensive care unit (ICU).

Mr Rolle, meanwhile, said the two percent economic growth projected for The Bahamas was “not at a very high or optimistic projection. It’s not something that’s out of the realm of achievable”. However, he added that this nation could not lose sight of the fact it had seen real GDP (gross domestic product) slashed by at least 16 percent in 2020, and that the road to recovering this lost ground will take several years yet.

The Central Bank is forecasting that The Bahamas will only return to pre-pandemic growth levels of 2019 come 2023, and Mr Rolle added: “The numbers might look good, but it’s the base of 2019 that signals when we will have recovered all of the setback.”

He said many persons recalled to work, especially in the hotel and tourism industry, were still under-employed because their hours and earnings have been cut until visitor numbers rebound from the pandemic’s devastation.

On the tourism front, the Central Bank said: “Official data provided by the Ministry of Tourism showed that total foreign arrivals by first port of entry resumed at 93,876 during the month of May from virtually nil in the same period in 2020, when international border closures and lockdowns were fully enforced.

“Underlying this outcome, air traffic measured 81,168 compared to just 20 in the preceding year, and recovered to only 51.1 percent of 2019 arrivals. Meanwhile, sea traffic reached 12,708 vis-à-vis nil passengers a year earlier.  A disaggregation by major port of entry revealed that arrivals to New Providence reached 55,568, representing air traffic of 54,264; while sea passengers reached 1,304 relative to no visitors in 2020.

“Likewise, visitors to Grand Bahama totalled 4,290 following the virtual absence of tourists during the same period last year. Underlying this outturn, sea and air arrivals totalled 2,314 and 1,976, respectively. In addition, traffic to the Family Islands measured 34,018 visitors from a nil outturn in 2020, as the air and sea segments posted arrivals of 24,928 and 9,090, respectively.”

Turning to year-to-date numbers, the Central Bank added: “On a year-to-date basis, the tourism sector still maintained a significant visitor deficit, down by 83.6 percent from the first half of 2020, which also reflected a 47.5 percent decline. As cruise activity remained paused, sea passengers reduced by 97.5 percent relative to the 44.3 percent decrease in 2020.

“However, the fall-off in air arrivals tapered to 29.8 percent from 57.2 percent in the comparable period of the prior year... Only the Family Islands registered growth in air arrivals.” As for the vacation rental market, the report added: “Short-term rental data provided by AirDNA showed a moderation in the gains in the vacation rental market.

“Specifically, total room nights sold advanced by 16.5 percent, albeit a slowdown from the 19.5 percent increase in the same month in the previous year. In the underlying developments, the rise in bookings for entire place listings and hotel comparable listings moderated to 17.7 percent and 6 percent, from 20.4 percent and 12.8 percent last year, respectively.

“Meanwhile, the average daily room rate (ADR) for respective entire place listings and hotel comparable listings rose by 1.9 percent and by 0.4 percent to $500.19 and $178.20. On a year-to-date basis, total room nights sold rose by 19.5 percent, amid growth in bookings for entire place listings (21.8 percent) and in private room listings (2.3 percent). The ADR for both entire place listings and hotel comparable listings grew by 17 percent and by 8.0 percent to $473.66 and $167.78, respectively.”